Robots don’t need $15 an hour to do their jobs either. So all you calling for a higher minimum wage might just find you whined yourself out of a job. You force a wage down a business throat, jobs go away or cost is transferred to the customer. It’s just that simple.


Softbank has developed the Pepper robot. Pizza Hut, in association with Mastercard, is now testing it out in Singapore.

This is something that ought to make enthusiasts for a higher minimum wage think carefully.

This may only be a test but it is what the future has in store: more automation. And the higher the minimum wage, the faster this sort of technology is going to spread–thus destroying jobs.

The underlying and more basic point is that economics happens at the margin. When we change relative prices we change where that margin is. It might be profitable to use human labor at one price for labor, another for capital. The position changes if we raise the price of labor relative to capital. Well, no, the situation will change at some change in relative prices. I think we could make a reasonably convincing case for the decision about this little robot to be somewhere in that range of human labor costing $2.30 an hour to $15 an hour.

The robot is cute, but it’s also very cheap. More